Despite all global risks, Finland has shown determination in tackling the issues at hand with decisive planning and action in many policy segments – like in economic, energy and defence policies.
A turnaround in monetary policy in key regions globally was witnessed in 2024 with both the U.S. Federal Reserve and the European Central Bank cutting policy rates multiple times. Furthermore, the ECB ended reinvestments in its last remaining monetary policy purchase programme, the Pandemic Emergency Purchase Programme (PEPP), at the end of the year. The latter means that in Europe, the ECB balance sheet of monetary policy assets no longer supports the secondary market of debt securities but has started to reduce.
Thus, it is up to the capital markets to digest government debt issuance, in the euro government space over EUR 400 billion of net issuance in 2025 with almost the same amount of debt maturing on the ECB balance sheet and proceeds not reinvested.
And yet, global economic growth is expected to reach 3.3%, which is only slightly below the average of recent decades.
Likewise, geopolitical and political events that some foresee to be spelling the end of the multilateral contractual world order as we know it have taken place. Such fundamental change may or may not come to fruition, but certainly the risks of authoritarian governance spurring and keeping up aggression of a diverse nature, trade tensions affecting global growth and spread of disinformation weakening trust have been on the rise. With wars raging and endowments of key resources becoming a strategic prerogative, the world has become a more precarious place.
Yet, global economic growth is expected to reach 3.3%, which is only slightly below the average of recent decades. And despite the risks mentioned above, technological and political change can create significant opportunities for progress and welfare in numerous corners of the world.
What does all this mean for the Republic of Finland Government Bond (RFGB) market? Rising interest rates certainly have helped in keeping government bonds relevant for investors with monetary policy market stimulus being removed. Finland has shown determination of tackling the issues at hand with decisive action and planning in many policy segments – like in economic, energy and defence policies.
Sourcing economic growth
The outlook for medium-term economic growth in Finland has been a key theme for some time. In this Debt Management Annual Review, we have invited two guest columnists to touch upon the topic from different perspectives.
Mika Maliranta writes about the recent rise in the number of medium-sized enterprises that are adopting and commercializing new technologies while expanding operations thus offering a potential boost to the economy. Roger Wessman concludes how immigration, contributing to the working-age population, could improve the dependency ratio, the public sector deficit and, combined with faster economic growth, significantly slow the rise in the public debt ratio.
With these views we wish to underline the future potential for the economy and public finances.
Revising debt management strategy and State Treasury organisation
Operational turning points were a feature of Finnish government debt management in 2024.
The medium-term debt management strategy was revised by the Ministry of Finance in 2024. Pauli Kariniemi explains in his article the reasoning and objectives of the revision. Raising the average maturity of the debt portfolio over the medium term is expected to improve the predictability of interest expenditure while at the same time resulting in a somewhat higher expected average cost of debt. The strategy revision also includes measures promoting the safeguarding of liquidity, e.g. strengthening the cash buffer.
At the State Treasury, the organisation was revamped at the end of 2024 to strengthen core functions and re-enforce co-operation across the organisation. In 2025, Debt Management is a new department separate from the loan and guarantee administering functions that were previously part of the Finance Division. At the same time, two functions, Communications and IT Management, were centralised in the new organisation.
Issuance strategy
In 2024, the Republic of Finland successfully raised EUR 42.8 billion of funding in the capital markets covering the budgetary funding requirement and safeguarding central government liquidity. In 2025 the scale of our funding programme is approximately the same as last year. The gross borrowing requirement, including short-term funding, is foreseen to be EUR 41.9 billion currently. Given this similarity, the funding strategy and operations are expected to largely resemble those of 2024.
Keeping the RFGB bonds attractive to investors remains our long-term goal. We believe that Finland’s strong credit outlook and commitment to sound governance and sustainable development will support our bonds and serve investors well in the years to come.
